Written Commentary
CRUDE OIL
Crude oil has driven further into new high ground overnight, but it also faces a bearish supply outlook going forward, leaving it vulnerable to a pullback. Crude oil and the products have received a boost from reports that OPEC Plus output cuts in September were 115% of what they had agreed (In other words, their total output was even less than what they agreed to.) This follows reports last week that 10 of the 19 OPEC plus nations did not (or could not) meet their output quotas during August.
The OPEC Plus production shortfall news has also been a source of support for both ULSD and RBOB. News that Chinese exports of gasoline and diesel during September were well below year-ago levels has also provided a boost to product prices. European power plants may use distillates for their electricity production due to severe natural gas shortages, which supports ULSD.
NATURAL GAS
Natural gas has started the week with a gap-lower opening and a move to its lowest level in 3 1/2 weeks. Reports that Russia may increase its natural gas exports to western Europe as it prepares to start the Nord Stream 2 pipeline have pressured prices.
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